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The man who helped bring Vanguard’s low-cost fund model to Europe, sparking a fee war among the region’s largest exchange-traded fund providers, is to return to the US.

The $3 trillion passive manager said today it will replace the head of its European business, Tom Rampulla, who is heading back to the US to lead its business serving financial advisers.

The firm said Rampulla will be succeeded in London by John James, who is currently head of Vanguard Australia and is a former chief executive of the Port Adelaide Australian Football League team.

Vanguard, which specialises in low-cost index investing and ETFs, is one of the world's largest asset managers, with assets equivalent to the size of the entire hedge fund industry.

The vast bulk of its business is based in the US, with Europe accounting for only $93.6 billion of the total. It is a comparatively fast-growing region for Vanguard, however, with assets expanding by 24% during the course of 2014 while the firm's global asset total rose 9%.

Rampulla has led the European operation for the past seven years, since the firm relocated its base of operations from Belgium to London. His tenure has been marked by the onset of a "price war" in passive funds and ETFs in Europe, as Vanguard's competitors, which include BlackRock's iShares and State Street Global Advisors, respond to its aggressive cost-cutting.

The most recent volley from BlackRock arrived this morning, as the giant money manager announced it would cut fees for its flagship FTSE 100 index-tracking ETF, which has £3.8 billion under management, from 40 to just seven basis points, or 0.07% of managed assets per year. Vanguard's equivalent product costs 0.09%.

However, BlackRock has not cut fees across its entire range. The money manager runs two flagship S&P 500 ETFs, for example, the $12.6 billion iShares S&P 500 Ucits ETF and the $11 billion iShares Core S&P 500 Ucits ETF. The second fund costs just seven basis points, but the first fund still costs 40bps – almost six times as much.

BlackRock was the top-selling funds group in Europe by a significant margin, however, pulling in €29.2 billion in net sales during the year, almost twice as much as second-placed Intesa Sanpaolo with €16.8 billion.

ETFs and other passive exchange-traded products have been a strong growth area for Vanguard and its rivals alike.

With this month marking the 25th anniversary of the products, with the first listing in Canada on March 9 1980, according to market-researchers ETFGI, total assets invested in the products hit a new record high of $2.9 trillion as of the end of last month.